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    LAKE
    Earnings call· Apr 2026(Q1 FY27)

    LAKELAND INDUSTRIES Q1 FY27 earnings call LAKE

    Jun 9, 2026 Source

    Executive summary

    Lakeland Fire & Safety Q1 FY27 — Fire Services Growth and Margin Improvement

    Lakeland Fire & Safety delivered a transitional Q1 FY27, marked by strong 11% growth in Fire Services and significant improvement in net income and adjusted EBITDA, despite a year-over-year decline in gross margin due to strategic inventory build and certification costs. The company is focused on converting robust demand in Fire Services and key industrial channels into improved profitability and cash generation through operational execution and margin expansion initiatives in the latter half of the fiscal year. Strategic investments in the ISP platform and a simplified product portfolio are expected to drive long-term value.

    Highlights

    5

    • Net sales increased by $0.7 million or 1.4% to $47.4 million, driven by 11% growth in Fire Services.

    • Net income improved significantly to $0.4 million ($0.04 EPS) from a $3.9 million net loss in Q1 FY26.

    • Adjusted EBITDA excluding FX improved 79.6% to $1.1 million, with margin expanding to 2.3% from 1.3%.

    • Cash and cash equivalents increased to $17.4 million from $12.5 million, with $5.8 million net cash from operations.

    • Divestiture of HPFR and HiViz product lines for $14 million simplified the business and strengthened the balance sheet.

    Concerns

    3

    • Adjusted gross margin declined to 33.6% from 35.2% in the prior year, impacted by product mix (150 bps), NFPA certification costs (80 bps), and capitalized freight release (70 bps).

    • U.S. industrial business has not seen meaningful recovery, and oil and gas turnaround activity remains slow.

    • Middle East uncertainty temporarily slowed project timing and froze certain regional budgets for LHD Germany.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full-year 2027 revenue growth
    high single-digit growth
    high materiality
    High
    Full-year 2027 cash flow from operations
    positive
    high materiality
    High
    Adjusted gross margin
    continue to expand
    high materiality
    Medium
    Revenue growth, margin improvement, and EBITDA expansion
    become more visible
    high materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Fire Services
    Increased by $2.4 million compared to $21 million in the prior year period. Driven by Latin America, Mexico, and Viridian. Achieved NFPA 1970 certifications for a full head-to-toe product portfolio.
    Revenue contribution to total: 49%
    		$23.4 million11%——
    Industrial (Latin America)
    Delivered the strongest regional performance in Q1, attributable to disciplined commercial execution. Lead times extended due to Middle East conflict.
    Performance to plan: 119%
    		————
    Industrial (Asia)
    Delivered the strongest regional performance in Q1, attributable to disciplined commercial execution.
    Performance to plan: 132%
    		————
    Eagle (EMEA)
    Delivered double-digit growth in Q1. Expects opportunities to expand in H2 FY27 following an intended award under the National Fire Chiefs Council National Firefighter PPE framework in the U.K.
    		—double digit growth——

    Operational metrics

    25
    Net sales growth
    1.4%YoY
    Q1 FY27

    Net sales increased by $0.7 million to $47.4 million compared to $46.7 million in the prior year period.

    Sales revenue growth
    4.4%YoY
    Q1 FY27

    Sales revenue increased 4.4% year over year, with Fire Services growing 11% year over year.

    Net income
    $0.4 millionfrom net loss of $3.9 million YoY
    Q1 FY27

    Meaningful improvement from a net loss of $3.9 million in the first quarter of fiscal 2026.

    EPS
    $0.04from -$0.41 YoY
    Q1 FY27

    Per basic and diluted share, compared to a net loss of $0.41 per basic and diluted share in Q1 FY26.

    Adjusted EBITDA excluding FX
    $1.1 millionup 79.6% YoY
    Q1 FY27

    Improved from $0.6 million in the prior year period.

    Adjusted EBITDA excluding FX margin
    2.3%from 1.3% YoY
    Q1 FY27

    Compared to 1.3% in the prior year period.

    Adjusted gross profit
    $15.9 millionfrom $16.5 million YoY
    Q1 FY27

    Compared to $16.5 million in the prior year period.

    Adjusted operating expenses
    $14.8 milliondown $1.1 million YoY
    Q1 FY27

    Down from $15.9 million in the prior year period, due to cost reduction initiatives.

    Cash and cash equivalents
    $17.4 millionup from $12.5 million
    as of April 30, 2026

    Up from $12.5 million at the end of fiscal 2026.

    Working capital
    $92.4 million
    as of April 30, 2026

    Working capital of approximately $92.4 million at quarter end.

    Net cash provided by operating activities
    $5.8 millionfrom use of cash of $4.8 million YoY
    Q1 FY27

    Significant improvement from the use of cash of $4.8 million in the prior year period, due to HPFR and HiViz sale.

    Credit line borrowings
    $14 million
    Q1 FY27

    During the quarter, $14 million in credit line borrowings were made.

    Payments on debt facilities
    $19.1 million
    Q1 FY27

    Offset by $19.1 million in payments on debt facilities during the quarter.

    Inventory
    $77.7 milliondown $4.8 million
    as of April 30, 2026

    Down approximately $4.8 million from $82.5 million at the end of fiscal 2026, mainly due to the sale of HPFR and HiViz.

    Fire Services revenue mix
    49%
    Q1 FY27

    Continuing the strategic pivot from approximately 21% of revenues in fiscal '24 to 38% in fiscal '25 to 49% in fiscal '26.

    Trailing 12-month revenue
    $193.3 million
    TTM Q1 FY27

    Reflects meaningful top-line growth over the past year, including full contribution of fire acquisitions.

    Trailing 12-month adjusted EBITDA excluding FX
    $7.7 million
    TTM Q1 FY27

    Reflects margin pressure experienced during the year, which the company is actively working to recover.

    Gross margin pressure from product mix
    150
    Q1 FY27

    The largest impact on gross margin was product mix, tied to acceleration of finished goods inventory for NFPA certified products.

    Gross margin pressure from NFPA certification costs
    80
    Q1 FY27

    Incurred from additional NFPA certification costs and transition costs associated with prior certified products.

    Gross margin pressure from capitalized freight release
    70
    Q1 FY27

    Came from the release of previously capitalized freight costs as inventory was reduced, tied to a positive balance sheet action.

    Gross margin pressure from Fresno ISP startup costs
    30
    Q1 FY27

    Relate to the continued build-out of the ISP platform and should be viewed as investment in a growth initiative.

    ISP quarterly revenue (global)
    $4 million to $5 million
    Q1 FY27

    Current global run rate for the ISP business, with Fresno starting up and Denver coming online.

    ISP revenue per reasonable site
    at least $2 million
    annual

    Expected revenue generation for a reasonable ISP site, with potential for significant growth beyond this figure.

    ISP long-term revenue target
    $50 million to $60 million
    long-term

    Aspirational critical mass for the ISP business, expected to drive significant EBITDA margins and company value.

    ISP new site build-out cost
    $350,000 to $500,000
    per site

    Estimated cash cost for building out a new ISP location, such as Denver, with a swift return on investment.

    Industry KPIs

    9
    MetricValueDetails
    China trajectory—
    Inventory position$77.7 millionUSD
    Revenue by channelFire Services: $23.4 millionUSD
    Gross margin bridge33.6%%
    Revenue by geography—
    Operating margin sg a2.3%%
    Store fleet door investment—
    Wholesale order book directionrising
    Franchise product cycle performance—

    Product announcements

    4
    ProductTypeDetails
    New Pacific Structural Firefighting Helmetslaunch
    New Jolly Structural Bootslaunch
    New Lakeland Extraction Gloveslaunch
    New range of Lakeland and Viridian Structural and Wildland Gear material and reflective trim optionslaunch

    Deals & partnerships

    2
    Deckers LogisticsLogistics partnership

    Completed the transition of LHD Germany's operations from Wesseling to a third-party logistics model.

    National Fire Chiefs CouncilPPE framework awardGBP 220 millionseven-year term

    Eagle received notification of an intended award under the National Fire Chiefs Council National Firefighter PPE framework in the U.K. This framework has a total potential value of GBP 220 million over a seven-year term across all awarded suppliers. Lakeland is one of about 4 suppliers in most categories (hoods, gloves, boots, structural fire kit).

    Risks & headwinds

    4
    Middle East uncertaintyQ1 and Q2 FY27

    temporarily slowed project timing and frozen certain regional budgets

    Mitigation: Focused on converting identified opportunities, improving margins, and positioning LHD for stronger performance in the back half of fiscal 2027.

    U.S. industrial business and oil & gas market weaknessQ1 FY27, expected to gain traction in H2 FY27

    not yet seen a meaningful recovery in the United States, nor have we seen any meaningful uptick in oil and gas turnaround activity

    Mitigation: Focused on channel execution, pricing discipline, inventory alignment, and positioning the U.S. disposal business to benefit when end market demand strengthens.

    Extended lead times into Latin America due to Middle East conflictQ1 FY27

    extended our lead times into Latin America

    Mitigation: Focusing considerable efforts on mitigating any risk to performance through tight alignment between commercial and operations teams.

    Manufacturing and stock capacity constraintsQ1 FY27, ongoing

    new product demand growth that has outpaced our prior manufacturing and stock capacity

    Mitigation: Manufacturing ramp-up activities are underway at Lakeland, Viridian, Pacific, and Jolly. Strategically increased inventory in key fire categories and expedited freight to support customer demand and market launches.

    Q&A highlights

    6

    Inquired about the current backlog size compared to six months ago, its conversion to revenue, and the long-term growth potential given NFPA standards.

    Management confirmed the backlog is primarily in turnout gear with 8-12 week lead times, currently extended due to high demand. Manufacturing is ramping up in Mexico and the U.S. The NFPA standards have created an extended opportunity, exemplified by a 7-year, GBP 220 million UK tender framework.

    “The backlog is tied primarily to turnout gear. Typically in the 8- to 12-week lead time, manufacturing lead time frame, which we're pushing out a little bit on that because of capacity.”

    asked by Gerard Sweeney · answered by Barry Phillips

    2 min read6 chapters

    Detailed Narrative

    01

    NFPA 1970:2025 Certification & Fire Portfolio

    Lakeland achieved NFPA 1970 certifications for its head-to-toe fire portfolio, including Pacific Helmets, Jolly boots, Veridian turnout gear, and Lakeland turnout gear and gloves. This comprehensive certification was showcased at FDIC 2026 and Interschutz, generating strong customer engagement and tender activity, which is expected to drive future growth. The breadth of the certified portfolio is seen as a significant competitive advantage, as fire departments increasingly seek complete solutions from global providers.

    02

    Service Platform Expansion

    The ISP platform continues to build momentum as a recurring revenue and customer retention opportunity. Lakeland is expanding its service footprint by opening a new ISP location in Denver, Colorado, and expanding its Arizona PPE facility in Phoenix to support continued growth. The company also added CO2 decontamination capabilities in Fresno, California, differentiating its service offerings and strengthening its position as a full-service fire safety partner, providing advanced decontamination solutions.

    03

    Strategic Divestiture and Focus

    Lakeland completed the divestiture of its high-performance FR and HiViz product lines for approximately $14 million in cash proceeds. This strategic move simplified the business, strengthened the balance sheet, and improved liquidity. It allows for a more focused allocation of resources towards core Fire Services and industrial protective products, areas identified for stronger long-term growth and margin opportunities, aligning with broader efforts to reduce complexity and improve focus.

    04

    Industrial Business Outlook

    While the U.S. industrial business has not yet seen a meaningful recovery, and oil and gas turnaround activity remains slow, other regions like Latin America and Asia delivered strong Q1 performances, exceeding plan by 119% and 132% respectively. The company is cautiously optimistic💬 for the latter half of FY27, focusing on channel execution, pricing discipline, and inventory alignment to benefit when end market demand strengthens. Facilities in Vietnam and China remain at capacity due to improving demand.

    05

    LHD Repositioning and EMEA Performance

    In Europe, Lakeland is actively repositioning LHD, including a brand relaunch at Interschutz and the appointment of new sales leadership. Q1 and Q2 are viewed as transitional periods for LHD Germany, with operational improvements underway, including a shift to a third-party logistics model with Deckers Logistics. Eagle, a UK brand, expects expanded opportunities in H2 FY27 following an intended award under the National Fire Chiefs Council National Firefighter PPE framework, a seven-year program with a potential value of GBP 220 million.

    06

    Backlog and Production Ramp-up

    The U.S. fire business backlog, encompassing both Viridian and Legacy Lakeland products, continues to grow to historic levels. This is attributed to new product demand outpacing manufacturing and stock capacity, particularly for turnout gear. Manufacturing ramp-up activities are underway at Lakeland, Viridian, Pacific, and Jolly facilities to meet this demand, with the goal of converting the open order backlog into revenue and supporting market launches.

    AI-generated summary of the company’s earnings call. Not investment advice.